WTO Development Dimension:Doha Development Agenda, Aid for Trade, the Enhanced Integrated Framework (EIF) and Technical Assistance (TA) and Training (or TRTA)ESTIMATED TIME: 4 hours

OBJECTIVES OF MODULE 9

Present the main elements of the development dimension of the Doha Round of Negotiations;

present the legal provisions regarding Special & Differential Treatment for developing and least-developed country (LDCs) Members;

MODULE

9

introduce the mandate and concept of the EIF and ''Aid for Trade''; and,

introduce WTO trade-related TA and training, including the role of the Institute for Training and Technical Cooperation (ITTC).

I. INTRODUCTIONThe majority of WTO Members are developing countries. They play an increasingly important and active role in the WTO because of their numbers, because they are becoming more important in the global economy, and because they increasingly look to trade as a vital tool in their development efforts.

However, many developing countries (in particular, the least-developed among them) face particular difficulties in implementing their WTO commitments and benefiting from trade liberalization.

The link between trade and development has been recognized explicitly by WTO Members in the WTO Agreements. In the Preamble to the Marrakesh Agreement Establishing the WTO (the Agreement Establishing the WTO), Members recognize the need for positive efforts designed to ensure that developing countries, and in particular the least-developed among them, secure a share in the growth in international trade commensurate with the needs of their economic development. Furthermore, at the Doha Ministerial Conference, in November 2001, Trade Ministers launched the Doha Development Agenda (DDA). With this Agenda, WTO Members have placed development issues and the interests of developing countries at the heart of the current Doha Round of Negotiations.

This Module will introduce to the participant the following:

Special and differential treatment for developing and LDC Members as provided in various WTO Agreements and Decisions;

The main elements of the DDA as they pertain to trade and development;

The Enhanced Integrated Framework (EIF) for least-developed countries;

Aid for Trade, a new WTO work programme agreed by Ministers at the Hong Kong Ministerial, aimed at helping developing countries, in particular the least-developed, to build the trade capacity and infrastructure they need to benefit from trade liberalization; and,

WTO’s trade-related technical assistance (TRTA) activities and programmes which are geared towards sustainable trade capacity-building in beneficiaries.

Matters related to trade and development are treated in almost all WTO bodies on an issue/or agreement-specific basis. However, the Committee on Trade and Development (CTD) and its Sub-Committee on LDCs, both of which comprise of all WTO Members, are the two WTO bodies that deal exclusively with questions related to trade and development.

II. SPECIAL & DIFFERENTIAL TREATMENT FOR DEVELOPING COUNTRIES

II.A. WHO ARE DEVELOPING COUNTRIES IN THE WTO?

There is no WTO definition of "developed" or "developing" countries. Members decide for themselves if they are to be considered "developing countries". This is known as the principle of "self-election". However, other Members can challenge the decision of a Member to make use of provisions available to developing countries.

Regarding LDCs, the WTO recognises as such those countries which have been designated as "least-developed countries" by the United Nations Economic and Social Council. The criteria used by the United Nations to designate such countries include: (i) low income; (ii) weak human assets; and, (iii) economic vulnerability.

For more information on the designation of LDCs, see: http://www.unctad.org/Templates/Page.asp?intItemID=3618&lang=1

II.B. WHAT DOES SPECIAL AND DIFFERENTIAL TREATMENT MEAN?

Trade plays an important role in fostering economic growth and reducing poverty in developing countries. In the Preamble to the Agreement Establishing the WTO, Members recognize that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world's resources in accordance with the objective of sustainable development. Furthermore, they recognize the "need for positive efforts designed to ensure that developing countries, and in particular the least-developed among them, secure a share in the growth in international trade commensurate with the needs of their economic development".

The concept of special and differential treatment for developing countries remains as important today, if not more so, than it was during the General Agreement on Tariffs and Trade (GATT). What began as a recognition of the need to provide flexibilities to those countries whose economies supported "low standards of living" or those in "early stages of development" in Article   XVIII of the GATT, has evolved over time into numerous provisions offering flexibilities across the different WTO Agreements.

In the initial years of the GATT, developing Contacting parties did not benefit from special and differential treatment. The need for developing countries to be granted additional flexibilities to compete on a level playing field with industrial countries gained prominence after the recognition, by newly independent developing countries who acceded to the GATT in the 1950s, that their capacity to make use of the rules to develop was not the same as that of the more industrialised nations. As a result, CONTRACTING PARTIES agreed to Article   XVIII of the GATT, which allows developing countries to deviate from their tariff commitments for purposes of establishing a particular industry and to apply import restrictions for balance-of-payments (BOPs) purposes. Subsequently, other provisions such as those included in Part IV of the GATT and the "Enabling Clause" (explained later on), were introduced with a view to, among others, increase the trading opportunities of developing countries and LDCs.

4

The Uruguay Round marked a new approach to the concept of special and differential treatment . By accepting the "single undertaking", developing countries like other then GATT Members, agreed to the whole spectrum of rights and obligations under the WTO Agreements. These new obligations included the binding of tariffs as well as commitments that extend beyond traditional GATT-type border measures, such as trade in services and trade-related aspects of intellectual property rights (TRIPS). The non-discrimination principle, embodied in the Most Favoured Nation (MFN) and National Treatment principles, has been a cornerstone of the GATT and now the WTO. However, many WTO provisions call for the granting of preferential market access for developing countries, temporarily or permanent exceptions from certain rules, as well as the provision of TA to developing country Members. All the provisions giving developed country Members the possibility to treat developing countries more favourably than other WTO Members as well as those which give developing country Members special rights to deviate from their obligations are referred to as "special and differential treatment provisions".

The rationale behind the concept of special and differential treatment as envisaged in the WTO Agreements is that developing countries are disadvantaged in their participation in international trade. Many developing countries produce mainly raw materials and primary commodity exports, affected by low prices and price volatility. In addition, they often lack the resources to overcome natural obstacles to trade or to address market failures, as well as the institutional development required to manage the cost of implementing certain WTO obligations (see box below). Special and differential treatment is considered a useful tool which recognizes the economic and developmental asymmetries among countries in order to provide special advantages to developing countries to help them benefit from trade liberalization and integrate into the multilateral trading system (MTS).

5

Why do Developing Countries require special and differential treatment?

The following arguments are commonly made regarding the special situation of developing countries and the special treatment they require:

Certain developing countries produce a limited number of products. In order to increase their production base, they would need to diversify into non-traditional sectors. However, such countries may suffer from market imperfections (e.g. lack of transparency, imperfect competition) that are not present in developed countries. In particular, new industries are associated with learning-by-doing costs and incur higher costs of production for an initial time period than established producers (infant industry argument). Thus, WTO Members recognize that, under specific circumstances, developing Members may need to take protective or other measures affecting imports. For example, Article   XVIII:2 of the GATT allows Contacting Parties (now WTO Members) whose economies can only support low standards of living and are in a lower stage of development, to maintain sufficient flexibility in their tariff structure to be able to grant the tariff protection required for the establishment of a particular industry;

developing countries are sometimes confronted with limited market outlets due to a small domestic market size or due to high trade barriers in other markets. In order to improve productivity, new industries in developing countries eventually need to be exposed to competition. In the presence of economies of scale, local markets cannot sustain a large number of producers; and,

developing countries are resource-constrained. This has at least three major consequences: (i) Developing countries find it harder to adjust to the impact of trade liberalization (they lack the transfer mechanisms to compensate the losers); (ii) they also face supply-side constraints which may prevent their industries from taking advantage of new trading opportunities, for instance, due to an inadequate transport infrastructure; and, (iii) the cost of implementation of certain obligations are associated with certain administrative and infrastructure implications that may strain developing countries capacities. In this regard, WTO rules provide longer transitional periods for developing Members to implement the WTO Agreements and accompanying reforms (e.g. Articles 65.2 and 65.4 of the TRIPS Agreement). Furthermore, the new WTO programme on "Aid for trade" (agreed by the Members at the Hong Kong Ministerial and explained later on) will help developing Members, particularly LDCs, to build the supply-side capacity and trade-related infrastructure they need to implement and benefit from the WTO Agreements.

Based on: World Trade Organization (WTO), World Trade Report 2007, Geneva: WTO p. 143-145.

It has been argued that special and differential treatment has not been an effective instrument to promote development in all developing country Members. According to some Members and commentators, special and differential treatment has not met its objective of helping most developing country Members (including the LDCs) to fully integrate into the MTS. Instead, in their view, special and differential treatment has contributed to trade distortions and rewarded inefficient producers. In addition, they argue that special and differential treatment provisions do not address appropriately the fact that policy interests and constraints of developing countries vary considerably from country to country. However, for other Members including the vast majority of developing countries, special and differential treatment is necessary for them to increase and diversify their exports, while improving market access for products of potential interests to them. Furthermore, most developing country Members consider special and differential treatment as a fundamental tool to enable them to comply with their WTO commitments and fully participate in the WTO.

6

II.C. PROVISIONS ON SPECIAL & DIFFERENTIAL TREATMENT

The universe of special and differential treatment provisions consists of more than 145 provisions spread across the different WTO Agreements and Decisions. A comprehensive overview of these provisions can be found in the document "Implementation of Special and Differential Treatment Provisions in WTO Agreements and Decisions" (WT/COMTD/W/77). All these provisions (including the provisions of the GATT and the ''Enabling Clause'' as presented below), generally referred to as "special and differential treatment provisions", can be divided into six categories:

(1) Provisions aimed at increasing trade opportunities of developing countries;

(2) provisions which require WTO Members to safeguard the interests of developing Members when adopting protective trade measures;

(3) provisions allowing flexibility of commitments, of action and use of economic and commercial policy instruments;

(4) provisions granting longer transitional periods for the implementation by developing Members of various commitments flowing from the Agreements;

(5) provisions on TA to developing countries in the implementation of their commitments as well as in their efforts to reap full benefits from trade liberalization; and,

(6) provisions relating specifically to LDCs.

Provisions under which WTO Members should safeguard the interest of developing country Members are the most numerous in the WTO Agreements, followed by flexibility provisions and those provisions aimed at expanding the trade opportunities of developing country Members. The extent to which developing country Members have recourse to these provisions varies across the range of WTO Agreements and Decisions. As we will see later on, the WTO provisions on special and differential treatment are currently under revision within the Doha Round of Negotiations with a view to strengthening them and making them more precise, effective and operational (Doha Declaration, para. 44). In addition, new special and differential treatment provisions are being negotiated across the different WTO Agreements.

II.C.1. PART IV OF THE GATT 1994 ("TRADE AND DEVELOPMENT")

In the period between 1957 and 1964, a large number of initiatives were taken in favour of developing country Members (Reports, Declarations and Programmes), which finally lead up to the addition of Part IV to the GATT with the entry into force of the "Protocol Amending the GATT to Introduce Part IV on Trade and Development" on 27 June 1966. Part IV of the GATT 1994 comprises three provisions: Article   XXXVI (Principles and Objectives), Article   XXXVII (Commitments) and Article   XXXVIII (Joint Action).

Part IV recognizes the need for a rapid and sustained expansion of the export earnings of the LDCs. To this effect, developed country Members are called upon to take a number of actions, on a "best endeavour basis"

7

(provisions expressing intent rather than binding obligations, e.g. "to the extent possible"). These include according high priority to the reduction and elimination of barriers to products currently or potentially of particular interest to developing Members, including customs duties and other restrictions which differentiate unreasonably between such products in their primary and processed forms (Article   XXXVII:1(a) ).

Part IV also codifies in the MTS the concept of "non-reciprocity" in trade negotiations between developed and developing country Members. The concept of non-reciprocity relates to developed country Members not expecting reciprocity for commitments made by them in trade negotiations to reduce or remove tariffs and other barriers to the trade of developing country Members. This has permitted developing countries, for example, to undertake lower levels of tariff binding (see also Module 3).

II.C.2. THE 1979 DECISION ON DIFFERENTIAL AND MORE FAVOURABLE TREATMENT, RECIPROCITY AND FULLER PARTICIPATION OF DEVELOPING COUNTRIES ("ENABLING CLAUSE")

a. 1971 Waiver In 1971, the GATT CONTRACTING PARTIES adopted a waiver to give legal effect through GATT rules to the unanimous agreement reached in the United Nations Conference on Trade and Development (UNCTAD) for a mutually acceptable and non-reciprocal Generalized System of Preferences (GSP). The waiver was granted temporally for 10 years to permit developed Contacting Parties to accord preferential treatment to products originating in developing countries, without extending such treatment to like products of other Contacting Parties, subject to certain conditions (L/3545). Tariff Preferences granted under the GSP were temporary and voluntary in nature.

For more information about "waivers" and the conditions applicable to them, see Section II.C.4 of this Module and Module 8.

b. Differential and More Favourable Treatment under the Enabling Clause

The ''Enabling Clause'' consolidated the concept of "differential and more favourable treatment" for developing Members as well as the principle of non-reciprocity in trade negotiations. Unlike the Waiver in the 1971 Decision, the Enabling Clause provided a permanent legal basis for developed Contracting Parties to accord preferential treatment to products originating in developing countries. Since the Enabling Clause was adopted in 1979 under the GATT, it applies only to trade in goods.

8

The main objective of the Enabling Clause is to increase commercial opportunities for developing Members. Its most significant provision enables developed Members to accord, on a voluntary basis, differential and more favourable treatment to developing Members as a departure from the MFN principle , subject to certain conditions. This provision is the WTO legal basis for the GSP (see paragraph 2(a) below). Under the GSP, developed country Members offer non-reciprocal preferential treatment (such as zero or lower duties) to products originating in developing country Members. The Enabling Clause allows for:

Preferential tariff treatment accorded by developed contracting parties to products originating in developing countries in accordance with the GSP (paragraph 2(a));

differential and more favourable treatment with respect to the provisions of the GATT concerning non-tariff measures governed by the provisions of instruments multilaterally negotiated under GATT (now WTO) auspices (paragraph 2(b));

less-developed Contacting Parties to enter into regional or global arrangements amongst themselves (i.e. agreements among developing country Members only) for the mutual reduction or elimination of tariffs and, in accordance with criteria or conditions which may be prescribed by the Contacting Parties, for the mutual reduction or elimination of non-tariff measures, on products imported from one another (paragraph2(c)); and,

special treatment for the least developed among the developing countries in the context of any general or specific measures in favour of developing countries (paragraph2(d)).

In 1999, Members adopted a waiver (until 30 June 2009) authorizing developing country Members to offer tariff preferences to imports from LDC Members without having to offer a similar preference to imports from other developed and developing countries. This expanded the scope of the Enabling Clause to cover preferences given by developing country Members to goods from LDC Members (WT/L/304).

c. Conditions for Applying the Enabling Clause

Conditions for Applying the Enabling Clause

Any differential and more favourable treatment under the Enabling Clause:

a) Shall be designed to facilitate and promote the trade of developing countries and not to raise barriers to or create undue difficulties for the trade of any other Contacting Parties;

b) shall not constitute an impediment to the reduction or elimination of tariffs and other restrictions to trade on a most-favoured-nation basis; and,

c) shall in the case of such treatment accorded by developed Contacting Parties to developing countries be designed and, if necessary, modified, to respond positively to the development, financial and trade needs of developing countries.

In addition, any Member taking action to introduce, modify or withdraw from an agreement providing such favourable treatment shall notify the Members and afford adequate opportunity for prompt consultations.

The Enabling Clause has less restrictive conditions than those provided in Article   XXIV of the GATT, which allows WTO Members to grant more favourable treatment to its trading partners within a customs union or a free trade area without extending such treatment to all WTO Members (you studied Article  XXIV – Regional Integration- in Module 8).

9

In the case of regional or global arrangements entered into amongst less-developed Members (agreements exclusively among developing countries or South-South agreements), sub paragraph 2(c) creates a right for developing country Members to enter into such arrangements without necessarily meeting the criteria set forth in Article   XXIV of the GATT. These arrangements (e.g. free trade agreements) may be notified to the WTO under the Enabling Clause.

Case Law on the "Enabling Clause": EC-Tariff Preferences

In EC-Tariff Preferences, the Appellate Body agreed with the Panel that the Enabling Clause is an "exception" to Article   I.1 of the GATT, which embodies the MFN Principle.

In this case, the measure at issue was the EU's GSP scheme for developing countries and economies in transition. In particular, special arrangements (Drug Arrangements) under the scheme to combat drug production and trafficking only applied to the products originated in 12 beneficiary countries and not to the like products originating in other Members, including those originating in India.

The Appellate Body concluded that the Drug Arrangements were not justified under paragraph 2(a) of the Enabling Clause, as the measure, inter alia, did not set out any objective criteria, that, if met, would allow for other developing country Members "that are similarly affected by the drug problem" to be included as beneficiaries under the measure.

Although upholding the Panel's conclusion, the Appellate Body reversed the Panel's reasoning and found that not every difference in tariff treatment of GSP beneficiaries necessarily constituted discriminatory treatment. Granting different tariff preferences to products originating in different GSP beneficiaries is allowed under the term "non-discriminatory" in footnote 3 to paragraph 2 of the Enabling Clause, provided that the relevant tariff preferences respond positively to a particular "development, financial or trade need" and are made available on the basis of an objective standard to "all beneficiaries that share that need".

II.C.3. SPECIFIC PROVISIONS UNDER THE WTO AGREEMENTS

The Uruguay Round marked a new approach to the "development dimension". The universe of special and differential treatment includes provisions spread across the different Multilateral Agreements on Trade in Goods (including the GATT 1994); the General Agreement on Trade in Services (GATS); the Agreement on TRIPS; the Dispute Settlement Understanding (DSU); and, various Ministerial Decisions (a summary of these provisions can be found in: http://www.wto.org/english/tratop_e/devel_e/anexii_e.doc). As mentioned above, these provisions on special and differential treatment can be classified into six categories, according to the objective they pursue.

a. Increase Trade Opportunities of Developing Country Members These provisions consist of actions to be taken by Members to increase the trade opportunities of developing country Members. These provisions are frequently, though not always, in "best endeavour" language (e.g. "to the extent possible", Members "should").

Examples are Articles   XVIII and XXXVI-XXXVIII of the GATT 1994; the "Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net-Food Importing Developing

10

Countries" (NFIDCs); Articles IV:1 and IV:2 of the GATS; and, paragraph 2(a) of the Enabling Clause. Lets take a closer look at two of them: Article   XXXVII of the GATT 1994 and Article   IV:1 of GATS.

As mentioned above, in Article XXXVII:1 of the GATT 1994, developed Members of WTO have committed themselves to accord high priority to the reduction and elimination of barriers to products currently or potentially of particular export interest to developing countries, including customs duties and other restrictions which differentiate unreasonably between such products in their primary and in their processed forms.

Article   IV:1 of GATS stipulates that the increasing participation of developing country Members in world trade shall be facilitated through the negotiation of specific commitments, relating to the strengthening of their domestic service capacity and its efficiency and competitiveness through access to technology on a commercial basis; the improvement of their access to distribution channels and information networks; and the liberalization of market access in sectors and modes of supply of export interest to them.

Overall, a broad question that seems to arise in relation to this class of provision concerns the extent to which these provisions have contributed to increasing developing countries' trade opportunities (considering that many of them do not constitute obligations on the part of developed country Members), how this may be assessed, and, if they have not contributed to increasing developing countries' trade opportunities, what else may be done.

b. Safeguard the Interests of Developing Country MembersThese provisions concern either actions to be taken by Members, or actions to be avoided by Members, so as to safeguard the interests of developing country Members. More than half of these provisions are mandatory. An example of a mandatory provision is found in Article   9.1 of the Agreement on Safeguards. According to this provision, safeguard measures "shall not be applied" against products originating in developing countries if share of imports is not in excess of three per cent, and if developing country Members with less than three per cent share do not account collectively for more than nine per cent of imports.

Questions raised regarding the effectiveness of these provisions are similar to those raised in relation to the "trade opportunities" class.

TYPE OF PROVISIONS EXAMPLES RELEVANT MODULE

Provisions to Safeguard the Interest of Developing Country Members

Agreement on Sanitary and Phytosanitary Measures (SPS Agreement), Articles 10.1, 10.4

Module 4

Agreement on Subsidies and Countervailing Measures (SCM Agreement), Articles   27.1 and 27.15

Module 5

Anti-Dumping Agreement, Article   15

Module 5

11

TYPE OF PROVISIONS EXAMPLES RELEVANT MODULE

Agreement on Safeguards, Article   9.1

Module 5

DSU, Articles 4.10, 8.10, 12.10, 12.11, 21.2, 21.7, and 21.8

Module 10

c. Flexibility of Commitments, of Action and Use of Policy InstrumentsThese provisions relate to: (i) actions developing country Members may undertake through exemptions from disciplines otherwise applying to the membership in general; (ii) exemptions from commitments otherwise applying to Members in general; or, (iii) reduced level of commitments developing country Members may choose to undertake when compared to Members in general.

Their importance may be understood in terms of their actual or potential role in facilitating the integration of trade and trade policy into the pursuit of wider development policy objectives. These types of provisions are especially important in those areas and agreements where WTO rules have extended beyond traditional GATT-type border measures. In almost all cases, flexibility takes the form of individual provisions which Members may choose, or not, to exercise.

TYPE OF PROVISIONS EXAMPLES RELEVANT MODULE

Provisions providing Flexibility of Commitments, of Action and Use of Policy Instruments

GATT 1994, Article   XVIII , Sections A, B C and D

Modules 8 and 9

Agreement on Agriculture, Articles 6.2, 6.4, 9.2(b)(iv), 9.4, 12.2, 15.1

Module 4

SCM Agreement, Articles   27.2   (a) and Annex VII; Article 27.4; 27.7; 27.8, 27.9; 27.10; 27.11, 27.12, and 27.13

Module 5

GATS, Articles   V:3 and XIX:2 Modules 6 and 9

As mentioned earlier, Article   XVIII of the GATT 1994 (Government Assistance to Economic Development), as interpreted by various Declarations and Decisions over time, allows developing country Members to: (a) maintain sufficient flexibility in their tariff structure to be able to grant the tariff protection required for the establishment of a particular industry; and, (b) apply restrictions for balance-of-payments (BOPs) purposes "in a manner which takes full account of the continued high level of demand for imports likely to be generated by their programmes of economic development" (the exception for BOPs purposes was explained in Module 8). While Sections A and B of Article   XVIII were expected by the drafters to be sufficient to enable developing country Members to meet the requirements of their economic

12

development, it was recognized that there may be circumstances where no measure consistent with these provisions is practicable, and special procedures were laid down in Sections C and D of the Article to deal with those cases.

The main exception is the GATS, where in addition to individual provisions, flexibility is built into the overall structure of the agreements providing flexibility on an individual, case-by-case basis through negotiated commitments. As we have studied in Module 6, the "positive list" approach of the GATS means that developing countries themselves decide in which sectors to make liberalization commitments. Article   XIX:2 of the GATS provides that in the negotiations for specific commitments in the process of liberalization, there shall be appropriate flexibility for individual developing country Members for opening fewer sectors, liberalizing fewer types of transactions, progressively extending market access in line with their development situation and, when making access to their markets available to foreign service suppliers, attaching such access conditions aimed at achieving the objectives of increasing their participation in world trade.

d. Longer Transitional Periods These provisions relate to time-bound exemptions from generally applicable disciplines. Most of the transition time periods in the various agreements have elapsed.

In some cases, the provisions, in addition to specifying a time-period, include modalities through which an extension might be sought. Transition time periods were an innovation of the Uruguay Round. They reflected the recognition that Members could incur transition costs to implement the WTO Agreements and accompanying reforms.

TYPE OF PROVISIONS EXAMPLES RELEVANT MODULE

Provisions granting Longer Transitional Periods

Agreement on Agriculture, Article   15.2

Module 4

SCM Agreement, Articles 27.2   (a) , 27.4; 27.14, 27.5, 27.6 and 27.11,

Module 5

TRIPS Agreement, Articles 65.2 and 65.4

Module 7

e. Technical AssistanceMany WTO Agreements provide for technical assistance to developing country and LDC Members. The WTO Agreements where these provisions feature prominently tend to be those which require significant levels of capacity for their implementation. Technical assistance may be given directly by developed country Members on a bilateral basis or under the technical cooperation programme of the WTO Secretariat.

WTO TA is a key component of the development dimension of the multilateral trading system and thus, it will be explained more in detail in Section III.B. Its objective is to empower developing countries and

13

LDCs to mainstream trade into their national development plans and strategies and to strengthen their knowledge base.

f. Least-Developed Countries (LDCs)All the provisions for differential and more favourable treatment of developing country Members are also applicable to LDC Members. Many provisions, however, contain additional benefits for LDC Members (see document "Special and Differential Treatment for LDCs", WT/COMTD/W/135). Some of these decisions are explained below.

TYPE OF PROVISIONS EXAMPLES RELEVANT MODULE STUDIED IN:

Provisions that contain additional benefits for LDC Members

Agreement on Agriculture, Article   15.2 , 16.1 and 16.2

Module 4

Agreement on Technical Barriers to Trade, Article 11.8

Module 4

GATS, Articles   IV:3 and XIX:3 Module 6

TRIPS, Article   66.1 and 66.2 Module 7

II.D. THE ENHANCED INTEGRATED FRAMEWORK (EIF)

The (enhanced) Integrated Framework (E)(IF) is the mechanism available to LDCs to help them use trade as an instrument of national development. "Trade" is used here in the wide sense of "producing and selling abroad". The EIF, formerly the IF, is an international partnership that was established to support LDC governments in trade capacity-building and integrating trade issues into overall national development strategies. Through the IF, multilateral agencies such as the International Monetary Fund (IMF), International Trade Centre (ITC), United Nations Conference on Trade and Development (UNCTAD), United Nations Development Programme (UNDP), the World Bank and WTO combine their efforts with those of LDCs, their donors and other development partners to respond to the trade development needs of LDCs so they can become full and active players and beneficiaries of the MTS.

The IF was launched in October 1997 at the High-Level Meeting on LDC's Trade Development organised by the WTO in recognition of the supply side constraints facing LDCs. Since then, it has been constantly approved and has led to the current EIF. In fact, at the WTO Ministerial Conference in Hong Kong, in 2005, Ministers reaffirmed their commitment to better integrate LDCs into the MTS, and that the vehicle for doing so would be an enhanced IF, enhanced through increased financial resources to implement action plans, strengthened in-county capacities to manage, implement and monitor IF progress, and a more effective governance of the IF.

Please note that the EIF is not a new initiative but an enhanced (improved) version of the IF that has been in place since its inception. The EIF applies to all IF beneficiaries. Almost all LDCs are currently beneficiaries of the (E)IF.

14

The objectives of the EIF are:

To mainstream trade into LDCs' national development plans (NDPs) such as PRSPs;

to assist in the coordinated delivery of TRTA in response to needs identified by LDCs; and,

to develop the capacity of LDCs to trade, including through capacity-building and addressing supply constraints.

The EIF is designed to be the overarching mechanism available to LDCs to map out the totality of their trade priorities (upstream and down stream) and approach their donor community to seek collaboration and necessary financing.

The key principles at the core of the EIF:

Country-ownership of the process; the LDCs have the lead;

tripartite partnership: LDCs, EIF Agencies, Donors and other development partners;

demand-driven and tailor-made approach; and,

participatory approach, especially by involving the private sector at all stages.

The EIF process consists of four phases, namely:

Awareness-building on the importance of trade for development in the beneficiary LDC; and establishing/strengthening of the in-country IF governance structure;

preparing a Diagnostic Trade Integration Study (DTIS or DTIS update) to identify constraints to overall competitiveness and supply chains and sectors of greatest export potential. The DTIS includes an action matrix – a list of trade priorities – for better integration into the global trading system as well as write-up on the LDC’s strategy for IF implementation, and executing this strategy;

with respect to mainstreaming trade into the national development strategy; and,

with respect to seeking financing from the development partners for priority actions requiring external funding.

15

TO KNOW MORE... THE EIF

The EIF process has a global as well as an in-country governance structure and a multilateral Trust Fund attached to it.

The Trust Fund manager of the enhanced IF is UNOPS: UN Office for Project Services, taking over from UNDP which was the Trust Fund manager for the IF Trust Fund.

The EIF has two global governing bodies: the Integrated Framework Steering Committee (IFSC) and the Integrated Framework Board (Board) whose meetings take place at the WTO. At the global level, the EIF also has an Executive Secretariat (ES) administratively housed in the WTO and headed by an Executive Director (ED).

The governance at the in-country level is ensured by the National Implementation Arrangements (NIAs). One of the key elements of the EIF is building strong in-country capacities in LDCs to manage, implement and monitor the EIF process, and by so doing, to use trade as an engine for growth. This is reflected in the provision to finance National Implementing Arrangements through the Trust Fund of the EIF (through Tier 1 of the EIF Trust Fund). Specifically, beneficiary countries are expected to set up National Implementing Units (NIUs) to assist the Focal Points (FPs) in coordinating among the various government agencies and the private sector on trade and IF issues, helping with donor coordination, and preparing and implementing projects, as well as monitoring the overall progress of the IF process in country. The national EIF programme is overseen by the National Steering Committee (NSC), providing the much needed support at the political level. The NSC, FP and NIU are supported by a Donor Facilitator (DF).

Funding of the actions identified in the DTIS and its Action Matrix and requiring financial resources is done trough three separate channels:

The EIF's Trust Fund (EIFTF);

local/regional/multilateral donors active in the respective EIF beneficiary LDC; or,

the national budget.

To obtain funds through the EIFTF: the EIFTF consists of two financing arrangements: Tier 1; and Tier 2. Activities proposed for EIFTF funding (rather than for local/regional/multilateral Donor action or national budget) should be translated into Tier 1 or Tier 2 projects. Project proposals should be designed and adopted at the local level before submission for approval by the Board. Specific procedures to ensure accountability and country ownership apply. Please refer to the EIF Website: www.integratedframework.org or the EIF Executive Secretariat for information on detailed procedures.

To obtain funds from your local/regional/multilateral donor action: it is advisable that throughout the EIF process in your country you keep your local donor community abreast and involve them early on so they can incorporate your trade priorities into their aid cycles and assist you in project design. Mainstreaming the DTIS and its Action Matrix into your national development plan such as PRSPs will greatly facilitate this as donors often look to these plans for their overall aid programming.

For more information on the IF, see: http://www.integratedframework.org.

16

WAIVERS Besides legal provisions stated explicitly in WTO Agreements, actions in favour of developing country Members, individually or as a group, may also be taken under "waivers" (e.g. "The Decision on Waiver regarding Preferential Tariff Treatment for LDCs" - see above). As we studied in Module 8, the Ministerial Conference may decide, in exceptional circumstances, to waive an obligation imposed on a Member by the Agreement Establishing the WTO (Article   IX:3 of the Agreement Establishing the WTO).

II.E. MONITORING BODIES

As mentioned earlier, most WTO bodies from time to time deal with specific issues of importance to developing country Members. However, there are two WTO bodies which deal exclusively with questions related to trade and development: The CTD and its Sub-Committee on LDCs. All WTO Members are also Members of the CTD and the Sub-Committee on LDCs.

II.E.1. THE COMMITTEE ON TRADE AND DEVELOPMENT (CTD)

The CTD is the focal point for consideration and coordination of work on development in the WTO. As such it is the forum where any WTO Member can bring up any matter related to development in the WTO context. If a developing country Member has a concern with respect to a specific provision of a particular WTO Agreement it is normally dealt with in the WTO body responsible for that Agreement whereas all broader, cross-cutting and systemic development matters are raised in the CTD.

The CTD keeps under continuous review the participation of developing countries in the multilateral trading system. It also reviews the application of the special provisions in the WTO Agreements in favour of developing countries. The CTD also receives notifications under the Enabling Clause (e.g. regarding the GSP or regional trade agreements among developing country Members).

In addition to holding between four and five regular meetings a year to discuss development concerns of WTO Members, the CTD can meet in different formats. In order to better manage its work, it meets in regular session, special session or dedicated session. The CTD special sessions concern the DDA negotiations on Special and Differential Treatment provisions whereas the dedicated session focuses on the work programme for small and vulnerable economies (for more detail see below). Since 2006, the CTD also holds sessions on Aid for Trade (also below).

II.E.2. SUB-COMMITTEE ON LDCS

As a subsidiary body to the CTD, the Sub-Committee on LDCs, is the focal point within the WTO for consideration of any matter relating to issues of interest to LDCs, including the implementation of the WTO Work Programme for the LDCs (WT/COMTD/LDC/11, see the section below on LDCs in the DDA). The Sub-Committee reports to the CTD.

17

EXERCISES

1. How is a Member classified as "developing" or "least developed" in the WTO?

2. Explain what the Enabling Clause is and list the four types of differential and more favourable treatment for developing countries included therein.

3. List the six categories used to classify the provisions on special and differential treatment. Give one example for each one.

18

III. DOHA DEVELOPMENT AGENDA (DDA) At the Doha Ministerial Conference, in November 2001, Trade Ministers launched the DDA placing the needs and interests of developing country Members at the heart of the WTO's work programme. Ministers stressed the importance of ensuring that developing countries, and especially the LDCs among them, secure a share in the growth of world trade commensurate with the needs of their economic development (WT/MIN(01)/DEC/1). Several specific mandates were set out in the Doha Declaration to achieve this objective. These include:

III.A. DEVELOPMENT ASPECTS OF THE DOHA DEVELOPMENT AGENDA (DDA)

III.A.1. IMPLEMENTATION-RELATED ISSUES AND CONCERNS

As explained in Module 1, "implementation related-issues and concerns” refers to problems raised particularly by developing country Members about the implementation of the current WTO Agreements. Some of this implementation issues were settled through negotiations at or before the Doha Ministerial. However, many other implementation issues of concern to developing countries have not been settled. These issues became an integral part of the work programme of the DDA.

The Implementation-related issues were spelt out in paragraph 12 of the Doha Declaration itself and a separate Ministerial ''Decision on Implementation-related Issues and Concerns'' (WT/MIN(01)/17). This Decision refers to several provisions on several matters including agriculture, SPS, textiles and clothing, TBT, anti-dumping, customs valuation and TRIPS, where Members face problems with implementation.

III.A.2. SPECIAL AND DIFFERENTIAL TREATMENT

Members reaffirmed that provisions for special and differential treatment are an integral part of the WTO Agreements. They agreed that all special and differential treatment provisions (studied in Section II.C of this Module) should be reviewed with a view to strengthening them and making them more precise, effective and operational (Doha Declaration, para. 44).

In this regard, the Doha Declaration (together with the "Decision on Implementation-Related Issues and Concerns", WT/MIN(01)/17) mandates the CTD to identify which of those special and differential treatment provisions are mandatory and to consider the legal and practical implications of making mandatory those which are currently non-binding. In addition, the CTD is to consider ways in which developing country Members, particularly the LDCs, may be assisted to make best use of special and differential treatment (Doha Declaration, para. 12). This mandate has been reaffirmed in the Hong Kong Ministerial Conference (Hong Kong Declaration, paras. 35-38 - WT/MIN(05)/DEC).

III.A.3. LEAST-DEVELOPED COUNTRIES (LDCS)

In Doha, Members recognized that the integration of LDCs into the MTS requires meaningful market access, support for the diversification of their production and export base and TRTA and capacity-building. Shortly after

19

Doha, Members adopted a Work Programme for LDCs (WT/COMTD/LDC/11) which is designed to respond to the LDC specific issues and concerns. The Work Programme contains seven elements: (i) market access for LDCs; (ii) trade-related technical assistance and capacity-building initiatives for LDCs; (iii) providing, as appropriate, support to agencies assisting with the diversification of LDCs production and export base; (iv) mainstreaming, as appropriate, into WTO's work the trade-related elements of the LDC-III Programme of Action, as relevant to WTO's mandate; (v) participation of LDCs in the MTS; (vi) accession of LDCs to the WTO; and, (vii) follow-up to WTO Ministerial Decisions/Declaration.

In Doha, Members committed themselves to the objective of duty-free, quota-free market access for LDCs' products and to consider additional measure for progressive improvements in market access for LDCs (Doha Declaration, paras. 42-43). Furthermore, in the Hong Kong Ministerial, Members agreed to take additional measures to provide effective market access, both at the border and otherwise, including simplified and transparent rules of origin so as to facilitate exports from LDCs. Members also agreed that developed country Members and developing country Members in a position to do so will provide duty-free, quota-free market access for at least 97 per cent of products originating from LDCs (Hong Kong Declaration, Annex F) (see also box below: Development Aspects of the DDA in Market Access – Agriculture, Non Agricultural Market Access (NAMA) and Services).

III.A.4. SMALL AND VULNERABLE ECONOMIES

Small economies face particular challenges in their participation in world trade, for example, lack of economies of scale or limited natural resources. In Doha, Members agreed to examine issues relating to the trade of small economies. The objective is to frame responses to the trade-related issues identified for the fuller integration of small, vulnerable economies into the MTS, without creating a sub-category of WTO Members (Doha Declaration, para. 35). The Doha Declaration mandates the General Council to examine these problems and make recommendations to what trade-related measures could improve the integration of small economies. This mandate was confirmed in Hong Kong (Hong Kong Declaration, para. 41). Small economies have also been active in defending their interests in both the DDA negotiations and in various WTO committees. Proposals made since 2001 by the proponents of small and vulnerable economies have been compiled in document WT\COMTD\SE\W\22R2 and represent progress to date with the Small Economies' Work Programme

III.A.5. TECHNICAL COOPERATION AND CAPACITY BUILDING

Members recognized that technical cooperation and capacity building are core elements of the development dimension of the MTS, and that the delivery of WTO TA shall be designed to "assist developing and LDCs and low-income countries in transition to adjust to WTO rules and disciplines, implement obligations and exercise the rights of membership, including drawing on the benefits of an open, rules-based MTS'' (Doha Declaration, para. 38). The critical importance of trade capacity-building was confirmed by Ministers in Hong Kong (Hong Kong Declaration, para 38). Section III.B will explain more in detail WTO TRTA.

III.A.6. AID FOR TRADE

In Hong Kong, Ministers agreed to create a new WTO work programme on "Aid for Trade" aimed at helping developing countries, particularly LDCs, to build the supply-side capacity and trade-related infrastructure that they need to implement and benefit from WTO Agreements and more broadly to

20

expand their trade (Hong Kong Declaration, para. 57). The Aid for Trade initiative will be explained in more in detail in the next section.

Development Aspects of the DDA in Market Access (Agriculture, NAMA and Services)

Agriculture plays an important role in the development of many WTO Members. However, many of the world's agricultural producers are currently disadvantaged because of high tariffs and competition from producers that receive high levels of domestic or export-related support. In the negotiations, developing country Members stand to gain from the reduction of tariff barriers and the expansion of tariff rate quotas in both, developed and developing country Members. Other issues of importance for developing countries include the special agricultural safeguard (SSG), the flexibility to designate an appropriate number of "special products", preference erosion and tropical products. Besides market access, developing country Members will also gain from the elimination of all forms of export subsidies and disciplines on all export measures with equivalent effect to be completed by the end of 2013 (Hong Kong Declaration, para. 6). In Hong Kong, Members also agreed to address cotton ambitiously, expeditiously and specifically, within the agriculture negotiations. In this regard, they agreed that developed countries will give duty-free and quota-free access for cotton exports from LDCs, from the commencement of the implementation period, and that all forms of export subsidies for cotton would be eliminated by developed countries in 2006, (Hong Kong Declaration, para. 11).

Trade in NAMA accounts for more than 90 per cent of world trade in goods. In Doha, Members agreed to negotiations which shall aim to reduce or as appropriate eliminate tariff peaks, high tariffs and tariff escalation (explained in Module 3), as well as non-tariff barriers, in particular on products of export interest to developing countries. In this regard, product coverage shall be comprehensive and without a priori exclusions. The negotiations shall take fully into account the special needs and interests of developing and LDC Members, including through less than full reciprocity in reduction commitments, in accordance with the relevant provisions of Article   XXVIII bis of GATT 1994 (Tariff Negotiations) and other relevant WTO provisions on special and differential treatment (Doha Declaration, para. 16).

In Hong Kong, Ministers agreed that developed country Members and developing country Member in a position to do so will provide duty-free, quota-free market access for at least 97 per cent of products originating from LDCs, defined at the tariff line level, no later than the start of the implementation period of the Doha Round (Hong Kong Declaration, Annex F).

As for the development dimension in the Services negotiations, developing countries stand to gain considerably from the further opening of trade in services, both on the part of their trading partners and in terms of their own policy regime. The negotiations on trade in services shall be conducted with a view to promoting the economic growth of all trading partners and the development of developing countries and LDCs (Doha Declaration, para. 15). In this regard, particular attention will be given to sectors and modes of supply of export interest to developing countries (Hong Kong Declaration, paras. 26 – 27). With regard to LDCs, Members shall implement the LDC modalities (TN/S/13) and give priority to the sectors and modes of supply of export interest to LDCs, particularly with regard to movement of service providers under Mode 4 -movement of natural people- (explained in Module 6).

Least-developed country Members are not expected to undertake new commitments (Hong Kong Declaration, para. 47). To know more on the development aspects of the DDA, see document WT/COMTD/W/143/Rev.3.

21

III.B. AID FOR TRADE

Although the volume of aid for TRTA and capacity-building has been increasing steadily since the launch of the DDA, the need for further assistance has been widely recognized by the international community. Aid for Trade was created as a complement to the DDA.

III.B.1. WHAT IS "AID FOR TRADE"?

''Aid for Trade'' is about helping developing countries to increase their exports of goods and services, to integrate into the MTS, and to benefit from liberalized trade and increased market access.

Trade has the potential to be an engine for growth in developing countries. However, as explained at the beginning of this Module, many developing countries face barriers that prevent them from benefiting from the world trading system. Some of these barriers, which the Doha Round of Negotiations aims to reduce or eliminate (e.g. tariff and non-tariff barriers), are in export markets. However, internal barriers, such as inadequate financing or poor infrastructure can be just as difficult for exporters to overcome. Aid for Trade is aimed at targeting these supply-side constraints.

Effective Aid for Trade will enhance growth prospects and reduce poverty in developing countries, as well as complement multilateral trade reforms and distribute the global benefits more equitably across and within developing countries. It is recognized that Aid for Trade cannot be a substitute for the development benefits that will result from the successful conclusion of the DDA, particularly on market access. However, it can be a valuable complement to the DDA.

Aid for Trade includes the following four main areas:

Technical assistance — helping countries to formulate trade policies, develop trade strategies, negotiate more effectively and implement outcomes;

infrastructure - building the roads, ports, and telecommunications that link domestic and global markets;

productive Capacity — investing in industries and sectors so countries can diversify exports and build on comparative advantages; and,

adjustment Assistance — helping with the transition costs from liberalization, such as those derived from tariff reductions, etc.

22

Figure 1: Aid for Trade

III.B.2. WHAT ROLE DOES THE WTO PLAY IN AID FOR TRADE?

As you know, the WTO delivers TA and capacity-building, but cannot deliver development assistance since it is not a development agency (such as the World Bank, Regional Development Banks or other development agencies). However, the WTO plays a catalytic role by ensuring that the agencies responsible for development understand the trade needs of WTO Members, and encouraging them to work together in addressing such needs.

This is related to the "coherence mandate" provided in Article   III:5 of the Agreement Establishing the WTO. According to it, one of the functions of the WTO is to promote coherence in global economic policy-making and to work with the World Bank, the IMF and other international actors to deliver a more coordinated international policy.

III.B.3. MONITORING AID FOR TRADE

The Director-General of the WTO carried out a wide series of consultations throughout 2006 on appropriate mechanisms to secure additional financial resources for Aid for Trade. His consultations focused in particular on how the WTO could best cooperate with intergovernmental financial, development agencies and main bilateral donors to support the expansion of their programmes of assistance for trade-related projects.

WTO Members mandated work on Aid for Trade, as adopted at the Hong Kong Ministerial Conference, was followed by the creation of a Task Force on Aid for Trade, which was established by the WTO Director-General and endorsed by the General Council in 2006. The Task Force made recommendations on "how to operationalize Aid for Trade" and on "how Aid for Trade might contribute most effectively to the development dimension of the DDA" (WT/AFT/1).

The mandate also gave a monitoring role to the WTO. This role will consist of global reviews held in the WTO's General Council.

Monitoring and evaluation takes place on three levels:

23

Global level (using data compiled by the Organization of Economic Cooperation and Development (OECD)-Development Aid Committee’s Creditor Reporting System (CRS) database) to assess whether additional resources are being delivered, to identify where gaps lie, to highlight where improvements should be made and to increase transparency on pledges and disbursements;

donor level (based on donor self-assessments), to share best practices, to identify areas for improvement and to increase transparency on pledges and commitments; and,

country and regional level (also self-assessments) to provide a more focused, country-specific perspective on whether trade needs are being met, financial resources are being provided and whether Aid for Trade is effective.

The Global Aid for Trade Review was the focal point of WTO's monitoring mandate in 2007. It brought together, partner countries, donors and those who've received aid, to examine and discuss what's been done and what should be done in the future. In 2008, the CTD gave a green light to the Aid for Trade Roadmap for 2008 — featuring national and sub-regional Aid for Trade reviews in Africa, Latin America and the Caribbean, and Asia and the Pacific. These were organized with the participation of the African Development Bank (http://www.afdb.org), the Inter-American Development Bank (http://www.iadb.org) and the Asian Development Bank (http://www.adb.org). The 2nd Global Review was held in June 2009.

NOTE

For more information on the WTO' work program on Aid for trade, see:

http://www.wto.org/english/tratop_e/devel_e/a4t_e/aid4trade_e.htm

The 1st Global Review of Aid for Trade in 2007 has been conducted collaboratively by the OECD and the WTO, see:

http://www.wto.org/english/tratop_e/devel_e/a4t_e/a4t_at_a_glance07_e.pdf

III.C. WTO TRADE-RELATED TECHNICAL ASSISTANCE

Trade capacity-building is a core function of the WTO Secretariat as a whole. The new orientation in WTO TRTA is geared towards sustainable trade capacity-building in beneficiaries. Its objective is to empower developing and LDCs with mainstreaming trade into their national development plans and strategies and to strengthen their knowledge base. Trade-related technical assistance is the WTO's contribution to the operationalization of the Aid for Trade Initiative.

Within the WTO Secretariat, the ITTC is responsible for the design, coordination, and implementation of WTO TRTA activities. Current efforts are geared towards enhancing the quality and impact of the Secretariat’s TRTA. The regular body overseeing TRTA activities is the CTD.

III.C.1. WHO CAN BENEFIT FROM WTO TRADE-RELATED TECHNICAL ASSISTANCE

WTO's TRTA programmes and activities are primarily geared towards government officials from developing and LDC Members and acceding countries, who are responsible for WTO-related issues ,

24

including the implementation of the WTO Agreements and the Doha Round of Negotiations. Efforts are being channelled to gradually reach a broader audience, including academia, civil society, parliamentarians and private sector representatives.

III.C.2. OBJECTIVES OF WTO TECHNICAL ASSISTANCE AND TRAINING

WTO's main objective is to assist beneficiary countries to:

Support domestic efforts to mainstream trade into national plans for economic development and strategies for poverty reduction;

enhance institutional and human capacity in the field of trade;

integrate more fully into the MTS;

exercise the rights of WTO Membership; and,

fully participate in multilateral trade negotiations.

III.C.3. THE WTO TECHNICAL ASSISTANCE AND TRAINING PLAN

In order to achieve its objectives, ITTC prepares a biennial Technical Assistance and Training Plan ("The TA Plan"), which provides the WTO Secretariat's backbone for the delivery of all activities.

The TA Plan identifies the types of activities delivered by the WTO Secretariat and sets out the objectives for the planning and delivery of such activities for the period concerned (see TA Plan 2008-2009, WT/COMTD/W/160). The TA Plan normally foresees a number of specific activities, mostly at regional level, to be delivered within a given year. It also foresees the possibility of additional activities at the national level on the basis of specific requests by Members. The TA Plan is adopted by the CTD

III.C.4. TECHNICAL ASSISTANCE ACTIVITIES

The TA Plan features a range of activities or "products", which can be used in the delivery of TRTA and training as well as some programmes. Each product targets different needs, objectives, audiences and levels of knowledge. Given the different nature of the TA and training activities proposed and the objectives for each product, it is important that, prior to enrolling a participant on a specific course, the needs of the participant and the expected benefits for the beneficiary country are carefully assessed.

The products can broadly be grouped in five categories: (to know more on each product see: http://www.wto.org/english/tratop_e/devel_e/train_e/course_details_e.htm).

WTO

Trade-Related

Technical

Assistance

1. General WTO-related TA and training: activities designed to offer a broad understanding of all WTO-related matters. Most of the products within this category are directed to government officials with a broad overall WTO responsibility and a general knowledge of the WTO. They include the Geneva-based Trade Policy Courses (TPCs), as well as the field based Regional Trade Policy Courses (RTPCs), lasting up to twelve weeks.

25

Products

2. Specialized and advanced TA and training: this category addresses specific topics geared mainly towards specialists. They may cover any WTO subject, including NAMA, SPS measures, services negotiations, dispute settlement. The main purpose is to address issues that cannot be covered in the general courses. They include national and/or regional seminars and workshops, as well as courses, and can be held in Geneva or in the field. This category includes, inter alia, a Programme for Government Senior Officials and a Course on Trade Negotiations Skills.

3. E-Learning programme: the e-Learning Programme takes full advantage of information technology and the Internet as a complement or alternative to traditional training face-to-face programmes. It does not require the simultaneous presence of trainees and trainers in Geneva or elsewhere. Each type of product targets different categories of participants and meets distinct needs. It includes the eTraining Programme, which provides interactive courses over the internet for government officials (courses such as this one and specialized courses on specific WTO matters, such as agriculture, SPS measures, trade remedies and TRIPS). It also includes a number of computer-based self-training modules available online through the WTO Webpage or on CD-ROM/DVDs.

4. Academic support for training and capacity-building: this programme is part of the Secretariat's effort to develop partnerships with the trade policy-related academic community in Member countries. These partnerships are designed to promote "joined up" capacity-building, simultaneously enhancing the academic capacity for such training in developing countries and promoting WTO-relevant research intended to strengthen their negotiating capacity. It ranges from national workshops for academics to a PhD support programme.

5. Trainee programmes and internships: the objective of these programmes is to build human capacities in a systematic and cumulative manner. They provide an opportunity to officials to get first hand exposure to the functioning of the MTS and/or to provide support to the respective beneficiaries' permanent missions or to the coordinators of selected WTO regional groups. They include the Netherlands Trainee Programme, the Mission Internship Programme and the WTO Regional Coordinator Internship.

III.C.5. SPECIFIC ACTIVITIES FOR LEAST-DEVELOPED COUNTRIES (LDCS)

The main challenge for the WTO is to assist LDCs to integrate into the MTS and to benefit from progressive liberalization in world trade. Another challenge is to assist LDCs to participate fully in the negotiating process of the DDA.

Least-developed countries are associated with over 40 per cent of all TRTA delivered, including national activities held in LDCs, regional seminars, workshops and training activities to which LDCs are invited. Thus, in line with the Doha Declaration, priority attention is and will continue to be given to LDCs. Some products are specifically or largely geared towards LDCs, for example those delivered under the EIF, the three week

26

Introduction Courses for LDCs, Geneva Weeks, the Reference Centres Programme and the Netherlands Trainee Programme.

NOTE

For more information on the WTO's TRTA activities and the ongoing and forthcoming training activities, see http://www.wto.org/english/tratop_e/devel_e/teccop_e/tct_e.htm

EXERCISES

4. What is the DDA? Give examples to show how developmental issues were placed at the heart of the negotiating agenda.

5. What is the WTO striving to achieve under the mandate of Aid for Trade?

6. Explain the main objective of WTO's TRTA and training and who can benefit from it.

27

IV. SUMMARY

Developing countries face particular difficulties in implementing and taking advantage of the WTO Agreements and trade liberalization. The WTO Agreements recognize this particular situation and the link between trade and development by providing special and differential treatment in favour of developing and LDC Members. Moreover, with the launch of the DDA in 2001, WTO Members have placed development issues and the interests of developing countries at the heart of the current WTO's work. Within the WTO, the CTD and its Sub-Committee on LDCs are the two bodies that deal specifically with development-related matters.

The provisions on special and differential treatment in favour of developing country Members included in the WTO Agreements and Decisions intend to address the special needs of these countries. According to their objective, such provisions can be divided in six categories: (1) provisions aimed at increasing trade opportunities (e.g. require to accord high priority to the reduction and elimination of barriers to products of particular export interest to developing countries); (2) safeguard the interest of developing country Members; (3) flexibility of commitments, of action and use of policy instruments (e.g. to maintain sufficient flexibility in their tariff structure to be able to grant the tariff protection required for the establishment of a particular industry); (4) longer transitional period for implementation; (5) technical assistance; and, (6) special provisions for LDCs. However, some of these provisions, specially those contained in categories 1 and 2, have been rarely invoked or used by developing country Members.

One of the main Decisions on special and differential treatment, known as the "Enabling Clause", consolidated the principle of "non-reciprocity" in trade negotiations. According to this principle, developed country Members should not expect reciprocity for commitments made by them in trade negotiations to reduce or remove tariffs and other barriers to the trade of developing country Members.

The Enabling Clause is an "exception" to the MFN principle embodied in Article I of the GATT 1994. The most significant provision of the Enabling Clause is that which enables developed country Members to offer - on a voluntary basis - more favourable tariff treatment to imports from developing country Members, without the obligation to extend such treatment to other WTO Members, subject to some conditions. Another important provision of the Enabling Clause relates to global or regional arrangements among developing country Members (explained in Module 8).

In launching the DDA in 2001, Ministers stressed the importance of ensuring that developing countries, and especially the least-developed countries among them, secure a share in the growth of world trade commensurate with the needs of their economic development. In the Doha Round of Negotiations, developing country Members stand to gain, among others, from improved market access in developed markets and expanded opportunities in other developing countries. In addition, several specific mandates were set out, such as to address the problems particularly developing country Members face in the implementation of the WTO Agreements, and to review all special and differential treatment provisions with a view to make them more precise, effective and operational.

In 2005, at the Hong Kong Ministerial, Ministers entrusted the WTO Director-General with a work programme on ''Aid for Trade'', which is aimed at helping developing countries to build the supply-side and trade-related infrastructure they need to implement and benefit from liberalized trade and increased market access. It is recognized that Aid for Trade can be a valuable complement to the DDA.

In this regard, the WTO plays a catalytic role by ensuring that the agencies responsible for development understand the trade needs of WTO Members, and encouraging them to work together in addressing such

28

needs.

Another core element of the development dimension of the MTS is WTO trade-related TA aimed at empowering developing country and LDC Members mainstreaming trade into their national development plans and strategies and to strengthen their knowledge base. To this end, the ITTC designs and coordinates TRTA and training activities and programmes within the WTO.

Least-developed countries receive special attention in the WTO. All the WTO Agreements recognize that they must benefit from the greatest possible flexibility. The provisions for special and differential treatment for developing country Members also apply to LDC Members. In October 1997, the Integrated Framework (now Enhanced Integrated Framework -EIF) was launched to support LDC governments in trade capacity building and integrating trade issues into their overall national development strategies.

29

PROPOSED ANSWERS

1. There is no WTO definition of "developing" country. The principle of "self-election" applies, that is, Members decide for themselves if they are to be considered "developing countries". Other Members may challenge the decision of a Member to make use of provisions available to developing countries. With respect to LDCs, the WTO recognises as such those which have been designated as "least-developed countries" by the United Nations Economic and Social Council.

2. The ''Enabling Clause'' consolidated the principle of non-reciprocity in trade negotiations. The main objective of the Enabling Clause is to increase commercial opportunities for developing Members. Its most significant provision enables developed Members to accord, on a voluntary basis, differential and more favourable treatment to developing Members as a departure from the MFN principle, subject to certain conditions.

The Enabling Clause allows for: (i) preferential tariff treatment accorded by developed Contacting Parties to products originating in developing countries in accordance with the Generalized System of Preferences (GSP) - under the GSP, developed country Members offer non-reciprocal preferential treatment (such as zero or lower duties) to products originating in developing country Members; (ii) differential and more favourable treatment with respect to the provisions of the GATT concerning non-tariff measures governed by the provisions of instruments multilaterally negotiated under the WTO auspices; (iii) less-developed Contacting Parties to enter into regional or global arrangements amongst themselves for the mutual reduction or elimination of tariffs and, in accordance with criteria or conditions which may be prescribed by the CONTRACTING PARTIES, for the mutual reduction or elimination of non-tariff measures, on products imported from one another; and, (iv) special treatment for the least developed among the developing countries in the context of any general or specific measures in favour of developing countries.

3. The provisions on special and differential treatment can be classified into six categories: (1) provisions aimed at increasing trade opportunities of developing countries (e.g. Article   VI of the GATS); (2) provisions which require WTO Members to safeguard the interests of developing Members when adopting protective trade measures (e.g. Article   10.1 of the SPS Agreement); (3) provisions allowing flexibility of commitments, of action and use of economic and commercial policy instruments (e.g. Article   XVIII of GATT 1994); (4) provisions granting longer transitional periods for the implementation by developing Members of various commitments flowing from the Agreements (e.g. Article   65.2 of the TRIPS Agreement); (5) provisions on TA to developing countries in the implementation of their commitments as well as in their efforts to reap full benefits from trade liberalization (e.g. Article   67 of the TRIPS Agreement); and, (6) provisions relating specifically to LDCs (e.g. Article   11.8 of the TBT Agreement).

4. At the Doha Ministerial Conference, WTO Members launched the DDA which placed the needs and interests of developing Members at the heart of the WTO's work programme. In the DDA, developing country Members stand to gain, among others, from improved market access in developed markets and expanded opportunities in other developing countries. In addition, several specific mandates were set out, such as to address the problems particularly developing country Members face in the implementation of the WTO Agreements, to review all special and differential treatment provisions with a view to make them more precise, effective and operational, to adopt a work programme for LDCs directed to respond to the LDC specific issues and concerns, to examine issues relating to the trade of small economies and to create a new programme on Aid for Trade. In addition, they recognized that technical cooperation and capacity-building are core elements of the development dimension of the MTS.

30

5. In Hong Kong, Ministers agreed to create a new WTO work programme on "Aid for Trade" aimed at helping developing countries, particularly LDCs, to build the supply-side capacity and trade-related infrastructure that they need to implement and benefit from WTO Agreements and more broadly to expand their trade. Aid for Trade is about helping developing countries to increase their exports of goods and services, to integrate into the MTS, and to benefit from liberalized trade and increased market access. It includes four main areas: (i) technical assistance; (ii) infrastructure; (iii) productive capacity; and, (iv)  adjustment assistance. Aid for Trade was created as a complement to the DDA.

6. Its objective is to empower developing and LDCs to mainstream trade into their national development plans and strategies and to strengthen their knowledge base. Priority attention is given to LDCs. Furthermore, TRTA is the WTO contribution to the operationalization of the Aid for Trade Initiative. WTO's TRTA programmes and activities are primarily geared towards government officials from developing and LDC Members and acceding countries, who are responsible for WTO-related issues, including the implementation of the WTO Agreements and the Doha Round of Negotiations. Efforts are being channelled to gradually reach a broader audience, including academia, civil society, parliamentarians and private sector representatives.

31